Use the table below to answer the following questions.
Table 6.3.1
-Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The sellers' share of the tax is
A)$2.00.
B)$1.50.
C)$1.00.
D)$0.
E)$2.50.

Question

Use the table below to answer the following questions.
Table 6.3.1 
-Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The sellers' share of the tax is
A)$2.00. 
B)$1.50. 
C)$1.00. 
D)$0. 
E)$2.50.

Quizplus · Accepted Answer

The sellers' share of a tax is determined by the change in the price they receive after the tax is imposed, compared to before. If the tax causes the price received by sellers to decrease, that decrease is their share of the tax. Without specific numbers from Table 6.3.1, a general explanation is that if a $2 tax is imposed and the sellers end up bearing $1.00 of it, it means the price they effectively receive for each unit sold has decreased by $1.00 due to the tax. This could happen through a combination of the price to buyers increasing and the received amount by sellers decreasing, with the sellers' portion being $1.00 less per unit than before the tax.

Use the Table Below to Answer the Following Questions